Flip That House? Think Twice

Don't let the excitement of the moment cloud your good judgment

The doubt surfaced hours after Lauri Lefner charged the $30,000 contract to two credit cards. She and her daughter had just left a three-day, $2,000 seminar with A&E's Flip This House real estate guru Armando Montelongo. House flipping is the rapid purchase and resale of investment properties, and when the seminar was over, Lefner and her daughter signed up for a more extensive program: a bus tour of distressed properties, followed by a year of coaching to help kick-start their own venture in house flipping.

Seminar Secrets

Always look past the hype. — Photo by Adam Voorhies

Before you hop onto anyone's ride to riches, look past the hype — the marketing brochures that promise big sales and big money — and evaluate the company. Talk to others in the field, search for online complaints, quiz past customers, and check with state regulators. In May, the Better Business Bureau issued a warning about San Antonio – based Montelongo, citing 60 customer complaints it had received about the company's seminars over the past 36 months.

Once Lefner got home, though, her fervor cooled. "I felt like I'd been brainwashed," she recalls. She immediately sent an e-mail asking for a refund. Two days later she sent a cancellation letter by FedEx. Still out $30,000 after six weeks and what she says was a string of broken promises, Lefner finally wrote to On Your Side. Fortunately, she had canceled within the three-day window provided by the seminar agreement. After I reached Montelongo seminar director Jordan Odiorne, Lefner received her missing refund. Odiorne's excuse: "The staff just took too long to approve it."

Shoddy presentations: "The handouts were full of misspellings," she remembers, and she sent us the proof. The firm's website also has careless errors.

Excessive pressure: "Those who didn't sign up for the bus tour were called losers," Lefner says. Montelongo didn't deny this in an interview, telling me it's his job to be tough on them. But emotional coercion should always be suspect. My rule: If they won't give me a day to think about it, I won't give them my money.

Last, ask yourself one question: If their advice is so great, how come they're in here asking for my money rather than out there making a fortune for themselves?

Ron Burley is the author of Unscrewed: The Consumer's Guide to Getting What You Paid for.